NEW YORK, January
29 – The banks with the worst
record in the United States
for gouging consumers with
overdraft fees, Ameris, has
applied to the Federal Reserve
to buy Atlantic Coast Bank in
Florida, and thereafter
Hamilton State Bancshares. On
January 29, Fair Finance Watch
filed formal opposition to
both with the Federal Reserve,
citing the gouging, Ameris'
disparate mortgage lending
record in Atlanta, Georgia and
Florida, and the Community
Reinvestment Act. Inner City
Press has requested records
under the Freedom of
Information Act. From Fair
Finance Watch's (and Inner
City Press') filing with the
Fed: "
This is a timely first
comment opposing and
requesting an extension of the
FRB's public comment period on
the Application by Ameris
Bancorp to merge with Atlantic
Coast Financial Corporation,
and thereby directly acquire
shares of Atlantic Coast Bank
in Jacksonville, Florida. Fair
Finance Watch has reviewed
Ameris' lending in 2016, the
most recent year for which
Home Mortgage Disclosure Act
(HMDA) data is available, in
both the Atlanta and the
Jacksonville Metropolitan
Statistical Areas (MSAs) and
finds both to be disparate. In
the Atlanta MSA in 2016 for
refinance loans, Ameris denied
the applications of African
Americans 3.75 times more
frequently than those of
whites. Ameris made 152 such
loans to whites, only 16 to
African Americans and only
eight to Latinos. In the
Atlanta MSA in 2016 for home
purchase loans, Ameris denied
the applications of African
Americans 2.11 times more
frequently than those of
whites. Ameris made 582 such
loans to whites, only 206 to
African Americans and only
48to Latinos. In the
Jacksonville MSA in 2016 for
home purchase loans, Ameris
denied the applications of
African Americans 2.69 times
more frequently than those of
whites. Ameris made 203 such
loans to whites and only SEVEN
to African Americans. In the
Jacksonville MSA in 2016 for
home improvements loans,
Ameris made five such loans to
whites and none to African
Americans or Latinos. In the
Jacksonville MSA in 2016 for
refinance loans, Ameris denied
the applications of African
Americans 2.2 times more
frequently than those of
whites. Ameris made 100 such
loans to whites and only FOUR
to African Americans. This is
disparate. Fair Finance Watch
also reviewed Ameris' home
purchase lending in the
Tallahassee MSA in 2016:
Ameris denied the applications
of African Americans 3.78
times more frequently than
those of whites. Ameris made
147 such loans to whites and
only FIVE to African
Americans. Ameris is
systemically disparate. Also
for the record, and to be
addressed at the requested
evidentiary hearings: “Georgia
bank socking customers with
overdraft fees,” Atlanta
Journal Constitution, January
3, 2017: “Ameris Bank
collected the most
overdraft/insufficient fund
fees per account of any U.S.
bank, says the analysis, which
is based on federal government
data from the first three
quarters of 2016. Ameris
collected an average of about
$176 per account.. The No. 2
bank on the list of the top 10
collected an average of about
$131 per account. The national
average was $17.76.”
This is predatory. Ameris
gobbled up Jacksonville Bank
and now seeks Atlantic Coast.
Would branched be consolidated
or closed? This must be
addressed, including at the
requested evidentiary
hearings. We note that Ameris
is already trying to look
beyond this challenged
proposal, to try to acquire
Hamilton State Bancshares,
Inc. and Hamilton State Bank.
We also hereby oppose that;
the two proposal should be
consolidated and hearings held
on both. On the current
record, Ameris' application
should be denied." In the
battle for the US Consumer
Financial Protection Bureau,
on January 10 US District
Judge Timothy Kelly ruled that
Leandra English lacks a
likelihood of success on the
merits in removing Mick
Mulvaney as acting director.
Meanwhile Mulvaney on January
16 issued this, on the Payday
Rule: "January 16, 2018 is the
effective date of the Bureau
of Consumer Financial
Protection’s final rule
entitled “Payday, Vehicle
Title, and Certain High-Cost
Installment Loans" ("Payday
Rule"). The Bureau
intends to engage in a
rulemaking process so that the
Bureau may reconsider the
Payday Rule. Although
most provisions of the Payday
Rule do not require compliance
until August 19, 2019, the
effective date marks
codification of the Payday
Rule in the Code of Federal
Regulations. Today’s
effective date also
establishes April 16, 2018, as
the deadline to submit an
application for preliminary
approval to become a
registered information system
("RIS") under the Payday Rule.
However, the Bureau may waive
this deadline pursuant to 12
C.F.R. 1041.11(c)(3)(iii).
Recognizing that this
preliminary application
deadline might cause some
entities to engage in work in
preparing an application to
become a RIS, the Bureau will
entertain waiver requests from
any potential applicant."
Oppositio came quickly: The
rule release was years in the
making, and it wouldn’t have
been possible without the
tireless
effort of community and faith
leaders, consumer and civil
rights advocates, and
countless people
across the country who
organized and spoke out
against the devastating payday
loan debt trap. There is no
reason to reopen the rule, and
doing so shows disdain for
consumer protection and
low-income communities that
are targeted by these debt
trap loans.” We'll have more
on this. On January 12, Inner
City Press / Fair Finance
Watch filed with the Office of
the Comptroller of the
Currency a challenge to the
application by E Trade Savings
Bank to acquire Trust Company
of America. Inner City Press
found and wrote: "E Trade
Savings Bank's most recent CRA
Evaluation, on its website,
gives it for example a rare
Needs to Improve rating for
the entire states of Arizona,
Colorado, Florida, Georgia,
Michigan and Oregon, and an
undeserved “Satisfactory” for
New York. How can a bank be
“Needs to Improve” in six
states - of its only 13
states, including DC - and be
moving for this acquisition?
Notwithstanding the OCC's
recent pronouncement about
banks with Needs to Improve
ratings, which ICP contends
should have been subject to
notice and comment, this low
performance level militates
for the extension of the
comment period and hearing(s)
ICP is requesting. Also, for
the record: “FINRA Fines
E*Trade Securities LLC
$900,000 for Supervisory
Violations Related to Best
Execution and Protection of
Customer Order
Information." Taken
together, these violations
militate for the extension of
the comment period and
hearing(s) ICP is requesting -
and for the denial of the
application. Earlier in
January Inner City Press /
Fair Finance Watch filed with
the Federal Reserve for
evidentiary hearings on the
application by Charles Schwab
Corporation to set up Charles
Schwab Trust Bank in
Henderson, Nevada. It has been
reported that this bank would
“focus on Schwab’s workplace
benefit plan clients, such as
employers who offer 401k
plans, and the intermediaries
who serve them.” But Schwab
has been sued by its own
employees, about 401k plans. See,
e.g., Severson v.
Charles Schwab Corp. , N.D.
Cal., No. 3:17-cv-00285-JCS,
complaint filed 1/19/17 ).
Schwab “larded” its own 401(k)
plan with expensive and poorly
performing investment funds
and services that earned fees
for the company at the expense
of workers’ retirement
savings, according to the new
lawsuit, filed Jan. 19. The
lawsuit also targets the
performance of Schwab’s stable
value fund and claims that
Schwab executives allowed the
plan’s trustee to profit from
the unallocated plan assets it
held. It is also noteworthy
that, Inner City Press wrote
to the Fed, despite the issues
there, Schwab reportedly held
merger talks with SoFi earlier
this year. Fair Finance Watch
has also reviewed, in Nevada,
Charles Schwab Bank's lending
in the Reno MSA. For home
purchase loans, all of the
loans were to whites (none to
Latinos or African Americans),
all to applicants over 120% of
MSA median income. The same is
true of refinance lending. On
the current record, these
applications should not be
approved." We'll have more on
this. English on December 6
asked U.S. District Judge
Timothy J. Kelly of the
federal district court in
Washington to issue a
preliminary and permanent
injunction against President
Trump that would block his
appointment of Office of
Management and Budget Director
Mick Mulvaney. Meanwhile, the
low percentage of banks being
given less than satisfactory
Community Reinvestment Act
rating has become
infinitesimal. The Office of
the Comptroller of the
Currency has signaled that
even those few low scores will
have no impact.

In a "Policy and
Procedures Manual" quietly
issued on November 8, with no
notice or comment, the OCC
says "An overall less than
satisfactory CRA rating is not
a bar to approval of an
application. Rather, the facts
and
circumstances of the
application must be evaluated
as discussed in this PPM." (PPM
6300-2). Now the
American Bankers Association
has issued a ironically termed
white
paper congratulating the
OCC for this and urging it and
the other agencies, including
the FDIC for which a Fifth
Third lawyer is nominated to
become chief, to go even
further. We'll have more on
this- and this: Seven months
after Wells Fargo Bank's CRA
rating was dropped two levels
to "Needs to Improve," barring
it from acquisitions, the
Office of the Comptroller of
the Currency has quietly said,
in a footnote to a Bulletin
issued on October 12, that
"The OCC’s policy is not to
lower a bank’s CRA composite
or component rating by more
than one rating level." See here,
footnote 8. So when did this
become the OCC's policy, after
it dropped Wells by two
levels? Call it a stealth sop
to Wells Fargo - and seemingly
a violation of the
Administrative Procedures Act.
We'll have more on this. In
July it emerged that over
800,000 people who took car
loans from Wells were charged
for needless auto insurance,
pushing 274,000 Wells Fargo
customers into delinquency and
triggering nearly 25,000
wrongful vehicle
repossessions. So much for the
industry having cleaned itself
up after the predatory lending
meltdown. New York City
announced it will not enter
any new relationships with the
bank, also suspending Wells
Fargo's role as a senior
book-running manager for NYC
General Obligation and
Transactional Finance
Authority bond sales. A
statement by Mayor Bill de
Blasio and Controller Scott
Stringer noted that
"Currently, Wells Fargo holds
contracts with the City to
provide banking services,
including to operate 'Lock
Box' services that hold taxes
and fees collected by the
City. There is approximately
$227 million of City dollars
held in Wells Fargo accounts."
Bu will they get involved in
opposing Sterling National
Bank, which Inner City Press
and Fair Finance Watch have
exposed as having "unreliable"
CRA data, notwithstanding the
OCC's scam "Satisfactory"
rating on May 30? Click here.
We'll have more on this. Back
in late March, the bank
settled for $110 million a
class action lawsuit for
having opened fake accounts
without customers' knowledge
or approval. But will Wells
Fargo, which Inner City Press
has
covered through its
acquisition of First Union and
even before, from Washington
to Alaska,
still be allowed to go forward
with its reported
plan to close 400 bank
branches, including in low and
moderate income areas? The
question reverberated, with
others, on Capitol Hill on
March 29 - and we'll have more
on it.

Meanwhile
the US Federal Reserve Board,
which bears more than a little
responsibility for the global
financial crash from 2008 due
to inattention to predatory
lending including on mergers,
has now further reduced its
scrutiny of bank mergers, with
little notice to date. Now
Fair Finance Watch and Inner
City Press has timely
challenged the Federal
Reserve's stealth reduction of
scrutiny, in a timely request
for reconsideration filed with
the Federal Reserve on the
evening of March 27, below.
FFW and others including NCRC
protested, and Inner City
Press has Freedom of
Information Act requests
pending regarding, the
application by People's United
to acquire Suffolk County
National Bank.

FFW showed
that in the the New York
City MSA, "People's United
made 82 home purchase loans to
whites and NONE to African
Americans or Latinos. This is
redlining; this proposed
acquisition could not
legitimately be approved and
People's United should be
referred for prosecution for
redlining by the Department of
Justice and CFPB."

When the Fed
ruled on People's application,
it added this: "In 2012, in
its order approving Capital
One Financial Corporation’s
acquisition of certain U.S.
operations of ING, the Board
stated that a proposal that
involves an acquisition of
less than $2 billion in
assets, that results in a firm
with less than $25 billion in
total assets, or that
represents a corporate
reorganization may be presumed
not to raise material
financial stability concerns
absent evidence that the
transaction would result in a
significant increase in
interconnectedness,
complexity, cross-border
activities, or other risk
factors. Since
establishing this presumption,
the Board’s experience has
shown that proposals involving
an acquisition of less than
$10 billion in assets, or that
result in a firm with less
than $100 billion in total
assets, are generally not
likely to create institutions
that pose systemic risks.
Transactions below either of
these asset thresholds have
typically not involved, or
resulted in, firms with
activities, structures, and
operations that are complex or
opaque. Such transactions have
also not materially increased
the interconnectedness or
complexity of the financial
system. Accordingly, the Board
now presumes that a proposal
does not raise material
financial stability concerns
if the assets involved fall
below either of the
aforementioned size
thresholds, absent evidence
that the transaction would
result in a significant
increase in
interconnectedness,
complexity, cross-border
activities, or other risk
factors." Why wasn't this
subject, at least, to notice
and comment rulemaking? Why
now? FFW and ICP have filed a
"timely request for
reconsideration, on behalf of
timely commenters Fair Finance
Watch and Inner City Press
(ICP) of the Approval and Stealthy
Announced Change in
Financial Stability Review
Presumptions in the Board's
March 16 Approval of
Application by People's
United Financial to acquire
100 percent of the voting
shares of, and thereby merge
with, Suffolk Bancorp, and
thereby indirectly acquire
voting shares of The Suffolk
County National Bank, both in
Riverhead, New York. While
there are many portions of the
approval order crying for
reconsidering, to be clear ICP
will herein have the following
focus, on the Federal Reserve
Board's misuse of this
proceeding and approval order
to purport to change its
review of future applications,
on the financial stability and
inevitably related factors.
What is the basis of the
Federal Reserve determining
that post-crisis scrutiny
should be reduced? The above
quoted portion of the order
must be reconsidered, stripped
out, and made subject to
public comment. On fair
lending issues, the Order does
not appropriately address or
take into account that in 2015
in the New York City MSA,
People's United made 110 home
purchase loans to whites and
only ONE to an African
American and only four to
Latinos.
Again, this is systematic
redlining; this proposed
acquisition could not
legitimately be approved and
People's United should be
referred for prosecution for
redlining by the Department of
Justice and CFPB. ICP said
that a hearing was needed, and
now after the Fed's insertion
of a policy change into the
Order, reiterates that." We'll
have more on this.

At what
point does bank executives'
spin to investors and the
media become more than
misleading? Take Community
Bank System (NYSE: CBU), which
has now received on March 13
consumer lending questions on
top of the nine
earlier
questions from
the Federal Reserve on its
proposal to acquire Merchants,
after its CEO
derided issues Fair
Finance Watch raised about the
proposal.

On March
13, the Fed asked CBU: "In
connection with the
application by Community Bank
System, Inc. (“Community”),
DeWitt, parent company of
Community Bank, National
Association (“Community
Bank”), Canton, both of New
York, to merge with Merchants
Bancshares (“Merchants”), and
thereby acquire Merchants
Bank, both of South
Burlington, Vermont, pursuant
to section 3(a)(5) of the Bank
Holding Company Act of 1956,
12 U.S.C. § 1842(a)(5),
Federal Reserve staff requests
the following additional
information:

1.
Provide an update on Community
Bank’s Community Reinvestment
Act (“CRA”) activities and
efforts since its July 27,
2016 CRA Performance
Evaluation. In your
response, address the
activities in the bank’s
assessment areas under each of
the lending, investment, and
service tests.

2.
Regarding consumer lending
products:

a.
reconcile page iv of the Bank
Merger Act (“BMA”)
application, which states that
Merchants Bank currently
offers consumer loans, with
page xiv of the BMA
application, which states that
Merchants Bank does not
currently offer consumer
lending products and services;
and

b.
explain how the consumer
lending products and services
offered by Community Bank,
including overdraft lines of
credits, are enhanced compared
to Merchants Bank’s
offerings."

On its
last proposal, CBSI
bad-mouthed a Community
Reinvestment Act protest even
as it had to delay its Oneida
deal. First, CBSI's "Hal
Wentworth said
that Inner City Press is not a
local group and pointed out
that letter was the only one
filed on the Oneida deal.
'This activist does not do
business with either Oneida or
Community Bank, but
nonetheless made vague
allegations regarding
Community,' Wentworth said.
'These allegations were
entirely without merit and
will be fully addressed by
Community Bank and Oneida
Savings in the application
process.'" Then the deal was
significantly delayed, with
CBSI pushing the date back.

More
spin: CFO Scott Kingsley
told
the media that FFW's protest
"is not the sole reason. We
have other things that have to
sequentially happen to get to
the technological conversion
in July. When we did not have
a definitive answer from the
Fed or other parties last
week, that put the
technological conversion at
risk, so we opted not to go
ahead.”

This time,
it went to the CEO Mark
Tryniski, who in January 2017
told
stock analysts that
"despite the baseless protest
filed with the Fed Reserve by
a serial activist, we expect
to close in the second"
question. We'll see. Among the
nine questions: "Community
Bank states that, to the
extent it does not intend to
continue to offer certain loan
products and services offered
by Merchants Bank post-merger,
it does not believe that not
offering such products and
services would have a
significant impact on the
target bank's communities. As
an example, Community Bank
cites the fact that Merchants
Bank would no longer accept
applications for FHA/VA loans
(on behalf of a mortgage
company), but that Community
Bank would offer loan products
and programs which are not
currently offered by Merchants
Bank that Community Bank
believes are comparable and
'equally valuable' to its
communities, such as FNMA's
Home Ready Program, Community
Bank's Affordable Housing
Program, and the USDA loan
program. Compare the features
of FHA and VA loans for which
applications are presently
taken by Merchants Bank with
the features of the products
and programs that Community
Bank asserts are comparable,
including any features of FHA
and VA loans that are not
covered by Community Bank's
offerings." Watch this
site.

With
Capital One failing in its
proposal to acquire the
"World's Foremost Bank,"
another bank merger challenged
by Fair Finance Watch failed.
In December it was Astoria's
proposed take over by NY
Community Bancorp, here.

And now
it's Capital One - Cabela, on
which Inner City Press
commented: "In the New York
City MSA in 2015, the most
recent year for which HMDA
data is available, for
conventional home purchase
loans Capital One denied the
applications of whites 23% of
the time, while denying
African Africans fully 45% of
the time, and Latinos even
more, 46% of the time. This is
unacceptable.

Meanwhile, Capital One
is “closing branches in
Laurel, Gaithersburg,
Frederick and Merrifield.”

Capital One came back with
snark, as has Simmons National
-- but then announced
including to NCRC that
it will withdrawn its
application. Onward.

***

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